America Has Hit “Peak Jobs”

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“The middle class is being hollowed out,” says James Altucher. “Economists are shifting their attention toward a […] crisis in the United States: the significant increase in income inequality,” reports the New York Times.

Think all those job losses over the last five years were just caused by the recession? No: “Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market,” according to an AP report on how technology is killing middle-class jobs.

When I was growing up in Canada, I was taught that income distribution should and did look like a bell curve, with the middle class being the bulge in the middle. Oh, how naïve my teachers were. This is how income distribution looks in America today:

That big bulge up above? It’s moving up and to the left. America is well on the way towards having a small, highly skilled and/or highly fortunate elite, with lucrative jobs; a vast underclass with casual, occasional, minimum-wage service work, if they’re lucky; and very little in between.

But it won’t be 19th century capitalism redux, there’ll be no place for neo-Marxism. That underclass won’t control the means of production. They’ll simply be irrelevant.

Of course the robot manufacturers dispute this characterization. “While automation may transform the workforce and eliminate certain jobs, it also creates new kinds of jobs that are generally better paying and that require higher-skilled workers,” says the NYT.

Here’s your answer: that’s a good thing…in the long run. Job loss isn’t actually a problem in and of itself. Instead it’s a symptom of something much larger.

Step back a minute. Way back. What precisely is the purpose of technological innovation? Why do we want to make things faster, smarter, better, healthier, new? To get rich? OK: to generate wealth, and ultimately, eliminate scarcity. The endgame, where we’re going as a species if we don’t screw up badly and destroy ourselves or burn out all our resources before we get there, is some kind of post-scarcity society.

Will people have jobs in a post-scarcity society? No. That’s what post-scarcity means. They’ll have things to do, authorities, responsibilities, ambitions, callings, etc., but not jobs as we understand them. So if the endgame is a world without jobs, how will we get there? All at once? No: by a slow and inexorable decline of the total number of jobs. Today’s America is just at the edge, the very beginning, of that decline.

Trouble is, America, more than any other nation, is built around the notion that all able-bodied adults should have jobs. That’s going to be a big problem.

Paul Kedrosky recently wrote a terrific essay about what I call cultural technical debt, i.e. “organizations or technologies that persist, largely for historical reasons, not because they remain the best solution to the problem for which they were created. They are often obstacles to much better solutions.” Well, the notion that ‘jobs are how the rewards of our society are distributed, and every decent human being should have a job’ is becoming cultural technical debt.

If it’s not solved, then in the coming decades you can expect a self-perpetuating privileged elite to accrue more and more of the wealth generated by software and robots, telling themselves that they’re carrying the entire world on their backs, Ayn Rand heroes come to life, while all the lazy jobless “takers” live off the fruits of their labor. Meanwhile, as the unemployed masses grow ever more frustrated and resentful, the Occupy protests will be a mere candle flame next to the conflagrations to come. It’s hard to see how that turns into a post-scarcity society. Something big will need to change.